If You Want Them to Do Better,

Give Them a Reason to Care

[This article is part of the Food for Innovative Thought Series (FIT). FIT seeks to inspire leaders within the retirement industry, and the financial services industry more broadly, to expand their vision of what is possible by sharing insights from our own work and that of other innovators.]

“I spend my money the instant I get it.”

“I spend my money the instant I get it,” my student told me. I was running a financial literacy class with middle and high school kids, and we were talking about how we actually put our financial literacy knowledge into practice. Most of my students agreed that they did not.

It’s not that my students didn’t know any better. We had looked at compound interest graphs, and my student’s eyes had widened. We had simulated adult budgets, and my students had solemnly expressed the importance of saving in their own words. This knowledge just wasn’t translating into any change in behavior. To put this in other terms, these kids knew full well how important vegetables were—they just didn’t plan on ever eating them.

Much like a healthy diet, saving actively doesn’t have any immediate benefit to offset the immediate distaste. And just like with health, kids aren’t the only ones making poor savings decisions despite having access to quality information. Our research of adults’ feelings and behaviors around retirement savings shows this. People know that saving is important, and everyone is worried that they aren’t saving enough for the future. However, to the average person, both the benefits to saving and the consequences for not saving enough seem distant and unreal.

We’ve all experienced the feeling of having a little extra spending cash on hand and the rush of positive emotions that comes with it. Freedom, opportunity, and joy (just to name a few) are emotions that always seem to accompany the act of spending one’s money instantaneously. Factually, these feelings are misguided, but if we’ve learned anything in our short Millennial lives, it’s that emotions often trump facts.

The fact is, only saving will yield true freedom, opportunity, and joy, but facts only impact a small number of people. While lack of information is a serious issue, people are happy to act with or without the right information, as long as they feel good about the process and/or have trust in the people behind it. Given this context, it should be of no surprise that for most people, graphs and charts are sterile, flat, and emotionally irrelevant. If I compare the feeling I get from seeing a graph to the satisfaction I get from having drinks with friends or buying a new pair comfortable jeans, the graph loses every time.

Another key point is that people don’t intrinsically have an emotional connection to their far future selves. When we ask people to put money away for the future, this is perceived as them taking money from themselves today to give to a stranger. Fact-based approaches don’t fundamentally address this issue.

So, if we want to actually change behaviors for the better, we need to connect emotionally with people, and help them develop empathy for the people they will become in the future. We need to create content that is compelling to the user now (i.e., activate the same reward centers in the brain that spending does), not just the person the user might someday be. One way to do this is by using avatars.

Avatars are visual and/or virtual representations of a character that represents a user. Avatars are often used in games to quickly create a strong emotional connection between the player and the events in the game. This works because we are all wired to care about people, and we’re definitely wired to care about ourselves. Avatars represent ourselves in a different context, and as a result, suddenly that different context seems vastly more real and more important.

This works for all sorts of contexts. Professor Steven S. Volk was concerned by how little his students cared about his history lessons. Students thought the history content in his class was dry and irrelevant to their lives. To address this, he creatively restructured a class so that each student would create an avatar. This avatar, representing the student, would live through the history taught in the class, and students would write about the time period from the perspective of the avatar. The class was a massive success. Students were engaged, and their emotional connection to the material lead to higher degrees of retention and understanding, along with an empathetic perspective of the people who lived through the studied time period. Students’ avatars successfully recontextualized history around the students and their lives.

We’ve used avatars to directly address savings behaviors with our game Thrive ‘n’ Shine. Players created an avatar and guided that avatar through life, practicing budgeting and savings skills to bring the avatar success and happiness. The avatar created a fierce emotional connection to financial decisions and their short- and long-term consequences. By experiencing these consequences through their avatars, players didn’t just see the impact of saving, they felt it. This experience directly lead to real world behavior change, and the vast majority of Thrive ‘n’ Shine players improved their savings behaviors after playing. In the coming months, we’ll be releasing additional data from our pilot study sponsored by the U.S. Treasury Department that shows the impact Thrive ‘n’ Shine has on players regarding confidence in money management and savings behavior changes.

Well meaning professionals in the financial services industry have long operated under the assumption that more information is enough to instigate a positive change in personal finance behavior. In most circumstances, however, information alone isn’t enough. Avatars are powerful tools that can be used to engage people around dry, abstract topics like personal finance, but the real lesson here is that more information won’t automatically change behaviors. Reaching the end-user on an emotional level is key. Graphs are easy to make, but the next time you’re tempted to make one, think twice. Whether through an avatar or a funny video or a heartwarming story, there’s probably a better way to present something that’s more interesting, more relevant, and more relatable.

Key Takeaways:

There is an significant emotional component involved in financial decision making.

If we want people to voluntarily save (and invest more) we have to reach them emotionally.

Avatars are one incredibly powerful way to help people form that emotional connection and make abstract topics like saving and investing more relatable.